All Forum Posts by: Ben Schaefer

Thanks @Jaysen Medhurst for the response! Much appreciated. 

My current mortgage is a 15 year and the refi would be on a 30 year resulting in a lower payment. 

Re: the 50% rule, the house would not likely cash flow positive assuming that number alone - so tacking on any additional expenses would be no bueno. It's an older home and the large items (windows, roof, HVAC) haven't been updated in many, many years so one of those items would put the property in the red fairly quickly.

This is good to know and I will keep this in mind moving forward. I need to develop a better feel for how/what to account for in that calculation. 

I think that makes sense too. I'm reading this as, it's important to find the balance between having as little invested in each property as possible - providing you with both the opportunity to realize the cash flow benefits AND fund additional properties - while not going crazy by stretching yourself and over leveraging.

If there's anything else worth keeping in mind please let me know. Again, very helpful to get someone with more experience's opinion to check my mental model.

I have a classic situation where we're looking to buy a bigger home and am making the rent vs sell decision on our primary residence.

Current Home

- 4/1 worth ~$210k

- Mortgage has $118k left @ 2.85%, 11 years remaining. $1,277 / month

- House could rent for $1,300 to $1,400

If cash out refi I could get $45k in hand and cut the payment in half. Running out the cash flow #s then, assuming the 50% role (which seems reasonable given an older home), I'd break-even or lose a couple hundred backs a month.

I love the thought of having paid off real estate generating cash flow down the road. However, in this situation I'm having to refi to 30 yr to get as low a mortgage as possible which I don't love. And at this point I'm banking on appreciation, which I do have high hopes for the neighborhood, but is merely speculation.

Am I missing something, should I be approaching this differently?